Apple Stock News and Forecast: AAPL remains subject to geopolitical whims

Apple (AAPL) stock remains in recovery mode along with most US indices as last week's shock and awe sell-off remain the low mark for now. Stocks have entered a changed landscape for 2022, and the situation is worsening from both a macroeconomic and geopolitical viewpoint. Investors were just about coming to accept the inflation and interest rate environment for 2022 and had adjusted portfolios accordingly. High-risk growth stocks were avoided, and the focus returned to those stocks with strong balance sheets and low valuations. Value versus growth had already seen strong outperformance for value.

Now things are worse. Sanctions will hit global growth and Europe especially hard. Energy costs are out of control, European gas prices are nearly ten times higher than a year ago. Oil prices we know all about. What we are left with then is higher inflation and now for longer likely reaching into 2024. Interest rates will have to rise, despite slowing growth, leading to stagflation. High-risk assets will struggle. Equities are viewed as a high-risk asset so expect bond inflows to outweigh equity fund inflows for the remainder of this crisis and beyond. Likely sector winners in the short term are defense stocks and oil stocks should have earnings well underpinned now for the remainder of the year. 

Apple (AAPL) stock is a harder one to quantify in this new environment. The stock certainly has defensive qualities, it has piles of cash which it can use for dividends, buybacks, or acquisitions. It has some pricing power that it can pass on to customers. However, rising commodity prices lead to higher semiconductor prices. Higher energy costs lead to higher shipping costs for inputs and outputs. Rising inflation and possible slowing growth will lead customers to scale back on purchases of luxury goods. Sanctions will hit globalized businesses.

Apple Stock News

With perfect timing, the EU has just come out and said EU countries must turn off the stimulus tap sharply and take a neutral fiscal stance. This means less free money and a focus on debt reduction, as well as echoes of the dreaded tight monetary policy that prevailed after the Great Financial Crash. This will mean less consumer spending. 

Apple Stock Forecast

We cannot avoid the overall bearish macro and geopolitical background. We would rate Apple as outperforming, but that is an outperform in a bearish market. We note the potential and hope for a swift end to the conflict as Russia and Ukraine meet again for talks. This will lead to a sharp relief rally, so short-term traders take note. The risk-reward is probably skewed to the upside. Wednesday is likely to see a slow gradual move lower or a swift rally on positive developments. Longer-term though the situation is clouded. Unless the conflict ends soon and sanctions are lifted quickly, we fail to see how equities can return to any form of bullishness. The situation from one month ago has not changed apart from lower economic growth. 

For now, Apple has found support at the 200-day moving average, which is set at $152 today. This is massive support. Break that and it is likely onto $138. The Relative Strength Index (RSI) and Moving Average Convergence Divergernce (MACD) remain bearish, confirming the price move.

Apple stock chart, daily